Discounted Cash Flow (DCF) Analysis Unlevered
The Gap, Inc. (GPS)
$13.2
-0.21 (-1.57%)
All numbers are in Millions, Currency in USD
Operating Data
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 15,855 | 16,580 | 16,383 | 13,800 | 16,670 | 17,020.71 | 17,378.79 | 17,744.41 | 18,117.72 | 18,498.88 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| EBITDA | 2,057 | 1,973 | 1,131 | -403 | 490 | 1,082.39 | 1,105.16 | 1,128.41 | 1,152.15 | 1,176.39 |
| EBITDA (%) | ||||||||||
| EBIT | 1,498 | 1,395 | 574 | -910 | -97.02 | 483.02 | 493.19 | 503.56 | 514.16 | 524.97 |
| EBIT (%) | ||||||||||
| Depreciation | 559 | 578 | 557 | 507 | 587.02 | 599.37 | 611.98 | 624.85 | 638 | 651.42 |
| Depreciation (%) |
Balance Sheet Data
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Total Cash | 1,783 | 2,455 | 1,654 | 2,398 | 877 | 2,001.17 | 2,043.27 | 2,086.25 | 2,130.15 | 2,174.96 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | ||||||||||
| Account Receivables | 282 | 282 | 316 | 363 | 335.01 | 342.06 | 349.26 | 356.61 | 364.11 | 371.77 |
| Account Receivables (%) | ||||||||||
| Inventories | 1,997 | 2,131 | 2,156 | 2,451 | 3,018 | 2,535.18 | 2,588.52 | 2,642.98 | 2,698.58 | 2,755.35 |
| Inventories (%) | ||||||||||
| Accounts Payable | 1,181 | 1,126 | 1,174 | 1,743 | 1,951 | 1,557.06 | 1,589.82 | 1,623.26 | 1,657.41 | 1,692.28 |
| Accounts Payable (%) | ||||||||||
| Capital Expenditure | -731 | -705 | -1,045 | -392 | -753.56 | -769.41 | -785.60 | -802.13 | -819 | -836.23 |
| Capital Expenditure (%) |
Weighted Average Cost Of Capital
| Share price | $ 13.2 |
|---|---|
| Beta | 1.888 |
| Diluted Shares Outstanding | 383 |
| Cost of Debt | |
| Tax Rate | 20.74 |
| After-tax Cost of Debt | 1.13% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 12.428 |
| Total Debt | 11,752 |
| Total Equity | 5,055.60 |
| Total Capital | 16,807.60 |
| Debt Weighting | 69.92 |
| Equity Weighting | 30.08 |
| Wacc |
Build Up Free Cash
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 15,855 | 16,580 | 16,383 | 13,800 | 16,670 | 17,020.71 | 17,378.79 | 17,744.41 | 18,117.72 | 18,498.88 |
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 2,057 | 1,973 | 1,131 | -403 | 490 | 1,082.39 | 1,105.16 | 1,128.41 | 1,152.15 | 1,176.39 |
| EBIT | 1,498 | 1,395 | 574 | -910 | -97.02 | 483.02 | 493.19 | 503.56 | 514.16 | 524.97 |
| Tax Rate | 40.45% | 24.13% | 33.52% | 39.66% | 20.74% | 31.70% | 31.70% | 31.70% | 31.70% | 31.70% |
| EBIAT | 892.07 | 1,058.38 | 381.58 | -549.14 | -76.89 | 329.91 | 336.85 | 343.93 | 351.17 | 358.56 |
| Depreciation | 559 | 578 | 557 | 507 | 587.02 | 599.37 | 611.98 | 624.85 | 638 | 651.42 |
| Accounts Receivable | - | 0 | -34 | -47 | 27.99 | -7.05 | -7.20 | -7.35 | -7.50 | -7.66 |
| Inventories | - | -134 | -25 | -295 | -567 | 482.82 | -53.34 | -54.46 | -55.60 | -56.77 |
| Accounts Payable | - | -55 | 48 | 569 | 208 | -393.94 | 32.76 | 33.45 | 34.15 | 34.87 |
| Capital Expenditure | -731 | -705 | -1,045 | -392 | -753.56 | -769.41 | -785.60 | -802.13 | -819 | -836.23 |
| UFCF | 720.07 | 742.39 | -117.42 | -207.14 | -574.45 | 241.69 | 135.45 | 138.30 | 141.21 | 144.18 |
| WACC | ||||||||||
| PV UFCF | 231.22 | 123.96 | 121.09 | 118.28 | 115.53 | |||||
| SUM PV UFCF | 710.07 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 4.53 |
| Free cash flow (t + 1) | 147.06 |
| Terminal Value | 5,812.77 |
| Present Value of Terminal Value | 4,657.77 |
Intrinsic Value
| Enterprise Value | 5,367.85 |
|---|---|
| Net Debt | 10,875 |
| Equity Value | -5,507.15 |
| Shares Outstanding | 383 |
| Equity Value Per Share | -14.38 |